Adobe to acquire TubeMogul

Pippa Chambers
By Pippa Chambers | 11 November 2016

Adobe has announced it’s set to acquire TubeMogul in a deal worth $540 million net of debt and cash.

The pair share a long list of joint customers that will benefit from the integration of TubeMogul into Adobe’s Marketing Cloud solutions such as Johnson & Johnson, Kraft, Liberty Mutual, L’Oréal, Nickelodeon and Southwest Airlines.

The definitive agreement to buy TubeMogul will see Adobe commence a cash tender offer to acquire all of the outstanding common stock of TubeMogul for $14 per share.

TubeMogul, a video demand-side platform (DSP) that enables brands and agencies to plan and buy video advertising across desktops, mobile, streaming devices and TVs, is run by US CEO and founder Brett Wilson and locally is headed-up by Sydney-based MD Sam Smith.

Wilson will continue to lead the TubeMogul team as part of Adobe’s Digital Marketing business.

"Of course, TubeMogul has long been known for independence and many of you partnered with us due to our buy-side, media-agnostic approach. What’s especially exciting about this acquisition is that it actually deepens that commitment," Wilson says.

"A combined Adobe and TubeMogul is uniquely aligned with advertisers. Once integrated, this will enable brands and agencies to plan, buy, measure and optimise their global video advertising with a neutral, independent partner that doesn’t have direct ownership of media or content. Our combined incentive is to arm marketers with insights on what's working - and act on it."

Adobe says the acquisition of TubeMogul will create “the first end-to-end independent advertising and data management solution” that spans TV and digital formats, “simplifying what has been a complex and fragmented process for the world’s biggest brands”.

Wilson says Adobe and TubeMogul share a similar culture and vision for the future of advertising and this new comprehensive platform will help marketers “always know” what’s working - and act on it.

Brad Rencher, executive vice president and general manager, digital marketing, Adobe, says the acquisition of TubeMogul further strengthens Adobe’s leadership in digital marketing and advertising technology. 

“Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs, Rencher says.

“With the acquisition of TubeMogul, Adobe will give customers a ‘one-stop shop’ for video advertising, providing even more strategic value for our Adobe Marketing Cloud customers.”

The transaction, which is expected to close during the first quarter of Adobe’s 2017 fiscal year, is subject to customary closing conditions. The potential financial impact to Adobe of this transaction is not reflected in financial targets previously provided by Adobe. Until the transaction closes, each company will continue to operate independently. Assuming the completion of the transaction, Adobe believes the acquisition of TubeMogul will be neutral to Adobe’s non-GAAP earnings in fiscal year 2017.  

Clear market acceleration around the DSP

Commenting on the move, Carat’s chief investment officer Ashley Earnshaw tells AdNews that it makes sense to bring a video solution into the Adobe stack.

“We look at this move with interest as there is a clear market acceleration around the DSP model for screens, which we Carat are at the forefront of in the market,” Earnshaw says.

“The scaling of this part of the industry will come with a need for agencies to partner with clients to support them in the navigation of the significant and rapid market change.”

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